The co-founders of a crypto mixing service — which was used for money laundering by making it harder to track illicit funds — have been sentenced to prison on conspiracy charges.
The former CEO and chief technology officer of Samourai Wallet — Keonne Rodriguez and William Lonergan Hill, respectively — were sanctioned for facilitating at least US$237 million in illegal transactions, laundering the proceeds of various criminal activities, including drug trafficking, hacking, fraud and other crimes.
According to court filings, in 2015, Rodriguez and Hill began work on a mobile app “that was designed and operated as a service for transmitting criminal proceeds.” Its development based around existing online services that were used to conceal the origin of cryptoassets, making it more difficult to track the proceeds of crime. They also actively marketed the app to potential criminal users on the dark web, U.S. authorities alleged.
Both men initially pleaded not guilty to the charges set out in a multi-count indictment. However, earlier this year, they changed their pleas to guilty on charges of conspiracy to operate an unlicensed money transmitting business. At the same time, the other counts were dismissed.
Now, a U.S. district court judge in New York has sentenced Rodriguez to five years in prison, while Hill received a four-year sentence. Both were also sentenced to three years of supervised release, and each fined US$250,000.
The pair have also paid US$6.4 million in forfeiture, “representing the fees Samourai earned,” U.S. authorities noted.
“The sentences the defendants received send a clear message that laundering known criminal proceeds — regardless of the technology used or whether the proceeds are in the form of fiat or cryptocurrency — will face serious consequences,” said U.S. attorney, Nicolas Roos, in a release.